Effective advertising

Is there a percentage of revenues to spend for effective advertising?

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Advertising dollars see a bell curve of results. At first good expenditures net you a good ROI. At some point, that ROI is at the top of the bell curve, and that is your maximum return rate. Then, you see a diminishing return on ROI.

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Small Business software
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Even on the top of the backside of the bell curve, you are making money, and more than on the front side, but you ROI is less than on top, but your total revenue is higher. As advertising does vary month to month, many companies try to find the spot on top of the bell curve and if they err in one way or another, it's on the slope to the backside.

This is very different from product to product. I've seen some companies spend 20% of revenue on advertising, and others less than 1%, and both be near the top of the bell curve.

Pie Graphs
Bar Graphs
Web software
Small Business software
Web Ranking software

Pie Graphs
Intranet software
Data entry software
Inventory software

Advertising on the net is cheaper than traditional media, so often you see small IT companies spending less than companies that advertise in hundreds/thousands of phone books across the nation.

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